2 AV Read aloud Draw Highlight IV. Perpetual Method Journal Entries (10 marks) ABC Co. deals in a variety of low-priced merchandise and uses the Perpetual Inventory method. Prepare the journal entries for the following transactions. The company year end is May 31 May 1 Sold merchandise on account to Hardy Co., $6,100, terms 2/10, n/30. The cost of the merchandise was $2,900. 2 Purchased merchandise on credit from Denver Suppliers, for $18,000, terms 2/10, n/30. 2 Paid $50 transportation charges on merchandise purchased from Denver Suppliers, paid by cash. 5 Granted a $100 allowance to Hardy Co. on merchandise sold May 1 because of minor defects discovered. 10 Received a cheque from Hardy Co. in full payment of their account 31 The merchandise inventory account had an ending balance of $75,000. A physical count of inventory was done and an inventory balance of $73,900 was reported